What is the difference between a soft fork and a hard fork?

The main difference between a soft fork and a hard fork lies in their impact on network consensus rules and the compatibility of nodes within a blockchain network:

1. **Soft Fork:**
   - A soft fork is a backward-compatible upgrade or change to the consensus rules of a blockchain network. In a soft fork, the new rules introduced by the upgrade are more restrictive than the existing rules, meaning that blocks that adhere to the new rules are still considered valid by nodes that have not yet upgraded.
   - Soft forks typically involve tightening or narrowing the interpretation of consensus rules, such as changing block size limits, adjusting transaction validity criteria, or modifying protocol parameters. Nodes that have upgraded to the new software continue to validate blocks and maintain consensus with nodes that have not upgraded, as long as the new blocks remain valid under the old rules.
   - Soft forks are considered non-contentious upgrades because they do not require all nodes to upgrade simultaneously. However, they may lead to temporary network fragmentation or the creation of a temporary fork if a significant portion of the network fails to adopt the new rules.

2. **Hard Fork:**
   - A hard fork is a backward-incompatible upgrade or change to the consensus rules of a blockchain network. In a hard fork, the new rules introduced by the upgrade are more permissive or expansive than the existing rules, meaning that blocks that adhere to the new rules are not considered valid by nodes that have not upgraded.
   - Hard forks typically involve loosening or expanding the interpretation of consensus rules, such as increasing block size limits, introducing new transaction types, or altering fundamental protocol parameters. Nodes that have not upgraded to the new software will reject blocks that adhere to the new rules, resulting in a permanent divergence or split in the blockchain.
   - Hard forks are considered contentious upgrades because they require all nodes to upgrade to the new software to maintain consensus and avoid network fragmentation. If a significant portion of the network fails to adopt the new rules, a hard fork can lead to the creation of a new and separate blockchain with its own set of rules and consensus mechanism.

In summary, the main difference between a soft fork and a hard fork lies in their impact on network consensus rules and the compatibility of nodes within a blockchain network. Soft forks are backward-compatible upgrades that maintain consensus with non-upgraded nodes, while hard forks are backward-incompatible upgrades that result in permanent divergence and require all nodes to upgrade to maintain consensus.